Carrier Corporation v. Goodman Global Inc. et al

Filing 303

MEMORANDUM. Signed by Judge Sue L. Robinson on 6/19/2014. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

CARRIER CORPORATION,

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Plaintiff,

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v.

GOODMAN GLOBAL, INC.,
GOODMAN MANUFACTURING
COMPANY, L.P., GOODMAN GLOBAL
HOLDINGS, INC., GOODMAN
DISTRIBUTION, INC., AND
GOODMAN SALES COMPANY,

Civ. No. 12-930-SLR

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Defendants,

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MEMORANDUM
At Wilmington this \C\ th day of June, 2014, having reviewed defendants' motion
for leave to file second amended answers (D .I. 186), motion for leave to file
supplemental briefing (D. I. 221), and the papers filed in connection therewith; the court
issues its decision based on the reasoning that follows:
1. Background. Plaintiff Carrier Corporation ("Carrier") commenced this
litigation against defendants Goodman Global, Inc., Goodman Manufacturing Company,
L.P., Goodman Global Holdings, Inc., Goodman Distribution, Inc., and Goodman Sales
Company (collectively, "Goodman"), asserting infringement of U.S. Patent No. 7,243,004
("the '004 patent"), titled "Self-Configuring Controls for Heating, Ventilating and Air
Conditioning Systems." 1 (D.I. 1, ex. A)
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Carrier originally asserted infringement of U.S. Patent No. 7,775,452 ("the '452
patent") as well, but the parties' claims and counterclaims regarding the '452 patent

2. The deadline for motions to amend the pleadings was January 31, 2013 (0.1.
27), and Carrier filed an unopposed motion for leave to file a first amended complaint on
that date. (D. I. 50; D. I. 51) Goodman answered the amended complaint and
counterclaimed on February 22, 2013. (0.1. 55; 0.1. 56) Fact discovery closed on
October 10, 2013, with the exception of certain depositions the parties agreed to hold
after that date. (0.1. 187 at 6; 0.1. 198 at 4) Presently before the court is Goodman's
motion for leave to file second amended answers pursuant to Rules 15 and 16(b) of the
Federal Rules of Civil Procedure, filed December 9, 2013, which include affirmative
defenses and a counterclaim that the '004 patent is unenforceable due to inequitable
conduct. 2 (D. I. 186; D. I. 187) Goodman also seeks leave to conduct limited additional
discovery relating to its inequitable conduct counterclaim (0.1. 187 at 2) and leave to file
supplemental briefing. (0.1. 221) The court has jurisdiction pursuant to 28 U.S.C. §§
1331 and 1338(a).

3: Specifically, Goodman alleges that the Aquasmart HVAC system
("Aquasmart") is prior art to the '004 patent, and that Rajendra Shah ("Shah") and Jerry
Ryan ("Ryan"), inventors of the '004 patent (collectively, "inventors"), misrepresented
and omitted information regarding Aquasmart to the USPTO during the prosecution of
the '004 patent. (D. I. 186, ex. 3 at 14; 0.1. 187 at 6) Goodman further alleges that it

have been dismissed by stipulation. (D. I. 273)
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As the '452 patent is no longer at issue, the court does not consider the parties'
arguments relating to the '452 patent. Specifically, the court does not address
Goodman's inequitable conduct grounds relating to the Comfort Zone II HVAC system
as prior art to the '452 patent (0.1. 186, ex. 4 at~ 40) or the Varitech system as prior art
to the '452 patent. (/d. at ~~ 31-3 7)

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acted diligently to confirm the underlying facts and to prepare its pleading of inequitable
conduct. (D.I. 187 at 1)
4. Standard of Review. The Federal Rules of Civil Procedure require courts to
freely give leave to amend "when justice so requires." Fed. R. Civ. P. 15(a)(2). The
court may exercise its discretion to deny leave to amend in situations in which the
moving party has delayed seeking leave and the delay "is undue, motivated by bad faith,
or prejudicial to the opposing party." Bjorgung v. Whitetail Resort, LP, 550 F.3d 263,
266 (3d Cir. 2008) (citation omitted). After a pleading deadline has passed, courts have
required the movant to also satisfy the more rigorous "good cause" standard of Federal
Rule of Civil Procedure 16(b)(4). 3 See, e.g., ICU Med. Inc. v. RyMed Techs., Inc., 674 F.
Supp. 2d 574, 577-78 (D. Del. 2009); Cordance Corp. v. Amazon.com, Inc., 255 F.R.D.
366, 371 (D. Del. 2009).
5. Discussion. "To prevail on a claim of inequitable conduct, the accused
infringer must prove that the patentee acted with the specific intent to deceive the PTO."
Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011). "In
a case involving nondisclosure of information, the accused infringer must prove by clear
and convincing evidence that the applicant knew of the information, 'knew that it was
material, and made a deliberate decision to withhold it."' Butamax Advanced Biofuels
LLC v. Gevo, Inc., Civ. No. 11-54-SLR, 2013 WL 571801 at *2 (D. Del. Feb. 13, 2013)
(citing Therasense, 649 F.3d at 1290). A claim of patent unenforceability premised upon
inequitable conduct triggers the heightened pleading standards of Fed. R. Civ. P. 9(b),
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Rule 16(b)(4) provides that a scheduling order "may be modified only for good
cause and with the judge's consent."

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and "the pleading must identify the specific who, what, when, where, and how of the
material misrepresentation or omission committed before the PTO." Exergen Corp. v.

Wai-Mart Stores, Inc., 575 F.3d 1312, 1328 (Fed. Cir. 2009).
6. Goodman filed the motion for leave to file second amended answers ten
months after the deadline to amend the pleadings and two months after the close of fact
discovery. "[C]ertain prejudice to plaintiff is inherent on [such a] timeline." Asahi Glass
Co., Ltd. v. Guardian Indus. Corp., 276 F.R.D. 417, 420 (D. Del. 2011) (denying leave to
amend defendant's affirmative defenses and counterclaims six months after the deadline
to amend the pleadings and after fact discovery). As such, Goodman must show good
cause under Rule 16(b) for its delay.
7. Goodman's inequitable conduct allegation regarding Aquasmart rests on a
document produced nearly seven months prior to the filing of the motion for leave to file
second amended answers, as well as upon publicly available documents Goodman
discovered independently. (D. I. 189, ex. C; D. I. 198 at 9) Goodman did not ask the
inventors about Aquasmart during their depositions. (D.I. 189, ex. A; /d., ex. B; 198 at
10) The timing of Goodman's motion, coupled with previously produced discovery and
publicly available documents relating to Aquasmart, negate the argument for good cause.

See Pfizer Inc. v. Sandoz Inc., Civ. No. 12-654-GMS/MPT, 2013 WL 5934635 at *3-4 (D.
Del. Nov. 4, 2013) (holding no good cause where defendant's motion for leave to amend
was filed four months after the relevant deposition and defendant did not notify plaintiff
until after the close of fact discovery); see a/so Asahi Glass, 276 F.R.D. at 420; but see

Raquette Freres v. SPI Pharma, Inc., Civ. No. 06-540-GMS, 2009 WL 1444835 at *5 (D.
Del. May 21, 2009) (holding good cause where the motion to amend was filed

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approximately one month after the relevant depositions and non movant was aware of the
motion before the close of discovery).
8. Allowing Goodman's motion at this late stage of the case and reopening
discovery for a new theory of liability would place an unwarranted burden on the court
and prejudice Carrier. See Asahi Glass, 276 F.R.D. at 420. Since Goodman has failed
to satisfy its burden of demonstrating that, despite diligence, the amendment could not
have been reasonably sought in a timely manner, the motion is denied.
9. Conclusion. For the foregoing reasons, Goodman's motion for leave to file
second amended answers is denied. 4 An appropriate order shall issue.

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Goodman's motion for leave to file supplemental briefing is denied as moot as
the supplemental briefing relates only to the '452 patent.

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